Session Host Licensing
Understand AVD licensing requirements for Windows client and Windows Server session hosts, eligible licenses, Azure Hybrid Benefit, and per-user access pricing for external users.
AVD licensing — what you actually pay for
Think of AVD like renting a furnished apartment.
The apartment itself (the VM) has a monthly rent — that is your Azure compute cost. But you also need a “right to live there” permit — that is the Windows license. Microsoft does not charge a separate fee for the AVD service itself. You just pay for the apartment (VM, storage, networking) and the permit (Windows license).
If your users are employees, the permit usually comes bundled with their Microsoft 365 subscription. If your users are external (contractors, customers), you pay a small per-user fee to Microsoft instead.
Windows client OS licensing
When your session hosts run Windows 11 Enterprise multi-session or Windows 11 Enterprise (for personal desktops), users need one of these eligible licenses:
| Eligible License | Includes AVD Rights | Notes |
|---|---|---|
| Microsoft 365 E3 / E5 | Yes | Most common for enterprise |
| Microsoft 365 A3 / A5 | Yes | Education SKUs |
| Microsoft 365 F3 | Yes | Frontline workers |
| Microsoft 365 Business Premium | Yes | Small/medium business (up to 300 users) |
| Windows 11 Enterprise E3 / E5 | Yes | Standalone Windows license (per-user) |
| Windows VDA per-user | Yes | For devices not covered by other licenses |
Key point: The user must have the license assigned — not the device, not the VM. AVD licensing is always per-user for Windows client operating systems.
🌐 Priya’s situation: “At NomadTech, all 200 staff have Microsoft 365 E3. That covers AVD access for Windows 11 multi-session — no extra license purchase needed. I just needed to budget for the Azure VM and storage costs.”
Windows Server licensing
If your session hosts run Windows Server (2019 or 2022) instead of Windows 11, the licensing model changes:
- RDS CALs (Remote Desktop Services Client Access Licenses) — per-user or per-device
- Windows Server license with active Software Assurance (SA)
You might use Windows Server session hosts when you need specific server applications, legacy compatibility, or when your users do not have eligible Microsoft 365 licenses.
| Aspect | Windows Client (11 multi-session) | Windows Server (2019/2022) |
|---|---|---|
| Eligible licenses | M365 E3/E5/A3/A5/F3, Windows E3/E5, VDA per-user | RDS CAL (per-user or per-device) + Server license with SA |
| Multi-session | Yes — built into Windows 11 Enterprise multi-session | Yes — native RDS capability |
| User experience | Full Windows 11 desktop experience | Windows Server desktop (no Store apps, different UX) |
| Common scenario | Most AVD deployments — modern desktop feel | Legacy apps, server-specific workloads, no M365 licenses |
| License type | Per-user only | Per-user or per-device CALs |
| Cost model | Usually included in existing M365 | Separate CAL + SA purchase |
When to use Windows Server session hosts
Most AVD deployments use Windows 11 Enterprise multi-session because it offers a familiar desktop experience and licensing is included with Microsoft 365. Use Windows Server when:
- Your application requires Windows Server (e.g. legacy LOB apps that only run on Server)
- Your users do not have Microsoft 365 or Windows Enterprise licenses and purchasing RDS CALs is cheaper
- You need specific server roles installed on the session host
The exam may present scenarios where you need to identify whether Windows Server or Windows Client is the right choice based on licensing and application requirements.
Azure Hybrid Benefit
Azure Hybrid Benefit (AHB) lets you use your existing on-premises Windows Server licenses with Software Assurance to reduce the cost of Azure VMs. For AVD, this means:
- Windows Server session hosts: Apply AHB to eliminate the Windows Server license cost on the VM — you only pay the base compute rate.
- Windows client session hosts: If you have qualifying Windows licenses, multi-session VMs are already covered by your per-user license. AHB primarily helps with Windows Server VMs.
You enable AHB when creating VMs by setting the license type to Windows_Server or Windows_Client in ARM templates, or selecting it in the portal.
🏢 Raj at TerraStack: “We had hundreds of Windows Server licenses with SA from our Citrix environment. Azure Hybrid Benefit let us reuse those licenses on AVD Windows Server session hosts — saved about 40 percent on compute costs during migration.”
The “hidden” costs beyond licensing
AVD has no service fee, but the total cost includes more than just VMs and licenses:
| Cost Component | What It Is | Tips to Manage |
|---|---|---|
| Compute (VMs) | Session host VMs running in Azure | Use autoscaling to deallocate VMs outside business hours |
| Storage | OS disks, FSLogix profile containers, data shares | Use Premium SSD for profiles, Standard SSD for less critical storage |
| Networking | Data egress from Azure, VPN/ExpressRoute | Outbound data from Azure is metered — minimise unnecessary transfers |
| Monitoring | Azure Monitor, Log Analytics | Budget for monitoring early — AVD Insights needs a Log Analytics workspace |
| Backup | VM backup, profile backup | Azure Backup for VMs, file-level backup for profile shares |
| Identity | Entra Domain Services or AD DS on VMs | Entra Domain Services has a monthly cost; AD DS on VMs means extra VM compute |
Exam tip: Know the full cost picture
Exam questions about AVD cost optimisation go beyond just VM sizing. They test whether you understand storage choices (Premium vs Standard SSD), autoscaling to reduce running hours, Azure Hybrid Benefit, and Reserved Instances for predictable workloads. If a scenario asks “how to reduce AVD costs,” think holistically — not just “smaller VMs.”
External user access — per-user access pricing
What if your AVD users are not your employees? Contractors, partners, or customers who do not have your organisation’s Microsoft 365 licenses need a different approach.
Per-user access pricing is an Azure meter that charges a monthly fee per external user who connects to AVD. Here is how it works:
- You enrol your Azure subscription in per-user access pricing (free enrolment).
- External users authenticate via Microsoft Entra External ID (B2B or B2C).
- Microsoft tracks which external users connect each month.
- You are billed per unique external user — the fee covers their AVD access rights.
There is no need to buy Microsoft 365 licenses for external users. The per-user access fee is automatically added to your Azure bill.
🏛️ JC at the Federal Department: “We have 50 external auditors who need access to our compliance applications three months a year. Per-user access pricing means we only pay for the months they actually connect — no annual license commitment.”
License compliance verification
To verify your AVD deployment is properly licensed:
- Check user license assignments in the Microsoft 365 admin centre or Entra ID — every internal user must have an eligible license.
- Verify Azure Hybrid Benefit is correctly applied to VMs — check the VM properties in the portal for the license type.
- Confirm per-user access pricing enrolment if you have external users — check under the subscription’s AVD per-user access pricing registration.
- Audit RDS CALs if using Windows Server session hosts — ensure you have enough CALs for your user or device count.
Exam concept: The exam expects you to recommend the correct licensing model for a given scenario. This means matching the OS (Windows client vs Server), user type (internal vs external), and existing licenses (M365, Windows Enterprise, RDS CAL + SA).
Priya's 200 NomadTech staff all have Microsoft 365 E3. She wants to deploy Windows 11 Enterprise multi-session host pools. Does she need to purchase any additional Windows licenses?
JC needs to provide AVD access to 50 external government auditors for three months per year. They do not have Federal Department Microsoft 365 licenses. What is the most cost-effective licensing approach?
Raj is migrating TerraStack from Citrix to AVD. They have existing Windows Server licenses with Software Assurance. Which benefit should Raj apply to reduce Azure VM costs for Windows Server session hosts?
🎬 Video coming soon
Session Host Licensing
Next up: Building Session Host Images — learn how to create custom images with your apps pre-installed, understand Sysprep, and automate image creation with Azure VM Image Builder.